In the 6th century B.C. Athenians gave extraordinary powers to one man to make needed reforms that would deliver Athens from economic stagnation and the gradual enslavement of the lower classes. That man, Solon, is believed to have forced the forgiveness of debts, forbade the pledging of oneself or one's family members as security for loans, and freed all those Athenians who had been made slaves through such pledges. He also repealed the harsh code instituted by Draco (from which we get the term Draconian) and replaced it with more humane laws. After decreeing that his reforms remain in place for 10 years, Solon went abroad for a years-long vacation--probably so that no one could try to change his mind about what he had done.
Today, in the face of circumstances that Solon would recognize, the case for widespread debt forgiveness has only recently been made. Stephen Roach, a longtime Wall Street economist, has called for lenders to bear considerable pain for the questionable loans they made during the previous boom. The trouble, as he points out, is that such forgiveness would require federal leadership which means that members of the U.S. Congress would have to penalize one of their most lucrative sources of campaign donations--the financial industry. The Athenian assembly had similar problems which is why they chose to give Solon autocratic powers.
Roach is acknowledging that many loans, especially those made to consumers, will not be paid back. An orderly process of debt forgiveness would spread the pain more evenly, speed up the debt deleveraging process that is depressing economic activity and provide more certainty about the results than would merely letting people default. Keep in mind that under new U.S. bankruptcy laws it is much harder for consumers to discharge debts, especially student debt. Doing nothing will guarantee us a generation of student-debt-laden college graduates who will be little better off than the debt slaves of Athens which Solon had to rescue from a life of despair.
Debt forgiveness is of special interest to those like myself who are concerned that society may be approaching or may have passed peak net energy. (For a more complete discussion of this, please see my piece Is Net Energy Peaking?) To recap briefly, net energy is what is left over for the non-energy sectors of society after we subtract the energy needed to extract, transport, refine and deliver energy to where it's needed. We may continue to extract more and more energy on a gross basis from the Earth for some time to come. But since the remaining energy resources are becoming harder and harder to get, we'll be spending more and more energy just to get them, leaving less and less for the rest of society. The day when net energy starts to decline will be a crucial turning point, and that will occur long before gross extractions of energy peak.
How is this related to debt? Well, energy is the motive force in the economy. Nothing gets done without it. Cheap energy makes modern economies hum. Expensive (and therefore scarce) energy makes them sputter. When they sputter, loans made when energy was cheap and the economy growing become more difficult to pay back. In fact, those loans are premised on the idea of perpetual economic growth which is simply not possible without perpetually growing energy supplies. That's two impossibilities in one sentence. If the necessary growth doesn't arrive--and it is not arriving now--the economic activity required to produce the flow of funds to pay back every loan won't be available. In aggregate loans made by the modern banking system are simply a bet on future growth.
The sooner we can admit that a large portion of the loans now outstanding will never be paid back in full and move on, the sooner we will be able to invest in the steps we need to prepare ourselves for a future marked by limits on resources. However, if no acknowledgement is forthcoming, then we are likely to face a long-term stagnation that will starve society of the capital it needs to make important investments in a more sustainable world.
What we need now more than ever is a leader or group of leaders who can tell us honestly and without alarm what is wrong and what we must do--and not be made to bow to the all-powerful financial interests. A few voices from the monied class are now saying that people at the top will have to make sacrifices for the good of society. Will a Solon for our age or several Solons across the world emerge--preferably not dictators as Solon was asked to be? Will they be able to exploit the growing awareness that debt must be reduced and that those who lent too much must bear some responsibility and some losses? Will there be a broad public consensus behind them that will allow them to act?
Solon began his great work when Athens was on the brink of revolution. Will we too arrive at the brink before modern Solons begin their work?
Sunday, August 28, 2011
Sunday, August 21, 2011
Who are the real radicals?
It is becoming standard procedure these days to decry those who oppose you politically as radicals as in "radical agenda," "radical views," "radical friends," and "radical past." Often this refers to suggested changes in policies that are no more than a few decades old. But I'd like to do something that will seem truly radical to those who are narrowly focused on the contemporary world. I want to look at what might be regarded as radical when considering not the last few decades, but the last 100,000 years.
For most of human existence, we lived as hunter-gatherers, leaving one place when the easy food had been exhausted to find new grounds for hunting and gathering. Only very recently in the human journey have we lived as farmers. The move from nomadic hunting and gathering to the settled life of farming must have seemed radical indeed. As Jared Diamond points out in his 1987 article "The Worst Mistake in the History of the Human Race," farming arose because of increasing population pressures. Whereas some groups chose farming over limiting their numbers, others stuck with hunting and gathering. But the vastly superior number of people in farming communities eventually led to the extinction of all but a few remaining hunter-gatherer communities on Earth.
Contrary to what we have been led to believe, the hunter-gatherers lived longer, healthier lives than their farmer successors. A varied diet and small group size guarded hunter-gatherers from the poor nutrition and epidemics that were constant companions to civilized humans. A flat social structure implied a rough equality or at least not much of a differentiation since wealth was in the forests and not in the hands of individuals.
Almost 10,000 years after the invention of agriculture, humans discovered fossil fuels. This, of course, vastly increased their ability to extract wealth from the land and the seas. And, it allowed for increasingly specialization which led to technical breakthroughs that would have seemed akin to magic only a few generations ago.
There were those at the beginning who protested the effects of this newfound power. The Luddites regarded the new deskilled world of industrial labor as a radical step away from the craft economy they had known. And, even today craft objects are often prized far beyond those made in factories and tend to last longer and work better than their manufactured counterparts. (Certainly, there are exceptions to this, but they only point out the extra cost of producing something of quality and durability meant to last not just a few years, but one or more lifetimes.)
The spread of the automobile and the construction of roads on which to run them eventually led to a whole new way of life labeled as suburban, far outside city centers and completely unrelated to rural life. Those who criticize the suburbs as an ahistorical aberration, contrary to the historical precedent of small villages and compact major cities, are proclaimed radicals by those who do not understand just how radical--and likely transitory--their suburban existences are.
All those in city and suburb alike are now fed by an agriculture powered by fossil fuels and modeled after the factory--and thus the term "factory farm." But farmers who run these factory farms often style themselves as "conservative" despite the rapid and radical change in farming methods in the last half century. But the term factory farm has in some circles become a term of derision as many seek out artisanal food processed locally from ingredients grown on small farms, often organically. Are these the new Luddites?
Of course, the burning of fossil fuels has now put the globe on a path to highly disruptive climate change. But the corporate boardrooms of the very industries most responsible for the burning of those fuels are supposedly filled with "conservative" businessmen and businesswomen. Naturally, they would not succeed at this colossal task of changing the climate without the assent of the consuming public which now enjoys an unparalleled standard of consumption. (I refuse to call it "standard of living" anymore.) And, many in that public consider themselves "conservative." But, ask yourself, What could be more radical than risking the wholesale decimation of the Earth's species including ourselves? We risk all this for a level of consumption that is far beyond our needs--I'm not including people in most poor countries--and which actually creates so-called "diseases of civilization."
I have tried to categorize America's political parties along a continuum not of conservative to liberal, but rather of conservative to radical. By this I mean that conservatives would want to preserve a way of life that ensures the long-term continuity and survivability of human communities. But I find only radical political parties in America. Therefore, crowded on the radical end of the spectrum I characterize the following groups in decreasing order of radicalness (with only tiny distinctions between them):
For most of human existence, we lived as hunter-gatherers, leaving one place when the easy food had been exhausted to find new grounds for hunting and gathering. Only very recently in the human journey have we lived as farmers. The move from nomadic hunting and gathering to the settled life of farming must have seemed radical indeed. As Jared Diamond points out in his 1987 article "The Worst Mistake in the History of the Human Race," farming arose because of increasing population pressures. Whereas some groups chose farming over limiting their numbers, others stuck with hunting and gathering. But the vastly superior number of people in farming communities eventually led to the extinction of all but a few remaining hunter-gatherer communities on Earth.
Contrary to what we have been led to believe, the hunter-gatherers lived longer, healthier lives than their farmer successors. A varied diet and small group size guarded hunter-gatherers from the poor nutrition and epidemics that were constant companions to civilized humans. A flat social structure implied a rough equality or at least not much of a differentiation since wealth was in the forests and not in the hands of individuals.
Almost 10,000 years after the invention of agriculture, humans discovered fossil fuels. This, of course, vastly increased their ability to extract wealth from the land and the seas. And, it allowed for increasingly specialization which led to technical breakthroughs that would have seemed akin to magic only a few generations ago.
There were those at the beginning who protested the effects of this newfound power. The Luddites regarded the new deskilled world of industrial labor as a radical step away from the craft economy they had known. And, even today craft objects are often prized far beyond those made in factories and tend to last longer and work better than their manufactured counterparts. (Certainly, there are exceptions to this, but they only point out the extra cost of producing something of quality and durability meant to last not just a few years, but one or more lifetimes.)
The spread of the automobile and the construction of roads on which to run them eventually led to a whole new way of life labeled as suburban, far outside city centers and completely unrelated to rural life. Those who criticize the suburbs as an ahistorical aberration, contrary to the historical precedent of small villages and compact major cities, are proclaimed radicals by those who do not understand just how radical--and likely transitory--their suburban existences are.
All those in city and suburb alike are now fed by an agriculture powered by fossil fuels and modeled after the factory--and thus the term "factory farm." But farmers who run these factory farms often style themselves as "conservative" despite the rapid and radical change in farming methods in the last half century. But the term factory farm has in some circles become a term of derision as many seek out artisanal food processed locally from ingredients grown on small farms, often organically. Are these the new Luddites?
Of course, the burning of fossil fuels has now put the globe on a path to highly disruptive climate change. But the corporate boardrooms of the very industries most responsible for the burning of those fuels are supposedly filled with "conservative" businessmen and businesswomen. Naturally, they would not succeed at this colossal task of changing the climate without the assent of the consuming public which now enjoys an unparalleled standard of consumption. (I refuse to call it "standard of living" anymore.) And, many in that public consider themselves "conservative." But, ask yourself, What could be more radical than risking the wholesale decimation of the Earth's species including ourselves? We risk all this for a level of consumption that is far beyond our needs--I'm not including people in most poor countries--and which actually creates so-called "diseases of civilization."
I have tried to categorize America's political parties along a continuum not of conservative to liberal, but rather of conservative to radical. By this I mean that conservatives would want to preserve a way of life that ensures the long-term continuity and survivability of human communities. But I find only radical political parties in America. Therefore, crowded on the radical end of the spectrum I characterize the following groups in decreasing order of radicalness (with only tiny distinctions between them):
- Libertarians - They champion allowing unfettered radical change to the Earth's surface, oceans and atmosphere and unfettered exploitation of its resources. Their distinguishing characteristic from other parties is that they--I mean the real Libertarians--believe government should favor no particular group in this process.
- Republicans - Like Libertarians they champion allowing unfettered radical change to the Earth's surface, oceans and atmosphere and unfettered exploitation of its resources. But they tend to rail against the evil of cities and laud the totally unsustainable and ahistorical hypertrophy of the suburbs. Unlike Libertarians they are eager to use government to steer public resources toward favored constituencies, primarily the wealthy.
- Democrats - Democrats believe that radical changes to the Earth's surface, oceans and atmosphere and exploitation of its resources should proceed at a slightly slower pace than Republicans do, and that there should be a minor appearance of public spiritedness by inconveniencing some industries with health and safety regulations and by redistributing some wealth via the tax system and government services from the wealthy to the middle and lower classes. Not surprisingly then, like Republicans Democrats see government as a way to steer public resources toward favored constituencies, primarily, but not exclusively, the wealthy.
- Socialists - Socialists are like Democrats used to be. Socialists continue to see government as a way to share society's wealth very broadly with the entire population, primarily through publicly-funded education, health care, transportation, pensions and a variety of social services. They tend to believe that government control of and/or stringent regulation of large parts of the economy are the best way to serve the public interest. Some socialist governments have embraced the idea that radical changes to Earth's atmosphere are unwise and have taken modest, but hardly adequate steps toward curbing those changes.
- Greens - We must distinguish between what I call the techno-optimist Greens and the ecologically-grounded Greens. The techno-optimists feel that technology will allow us to repair radical changes we've made to the Earth's surface, oceans and atmosphere and prevent new ones while radically reducing our exploitation of resources. We'll do all this without missing a beat when it comes to living modern, technological lives. Our use of resources may go down, but we won't have to give up any of the things we've come to expect. They believe that government will have a major role in this transition through regulation, incentives and taxation. One cannot dismiss their ideas as completely without merit. But they certainly partake of the radical catechism of the four previously mentioned parties. On the other hand, ecologically-grounded Greens accept that the modern industrial way of life cannot succeed. They sometimes offer a vision of what I'll call a craft-based, agriculturally-oriented society retaining some of the key technical benefits of industrial society.
Certainly, I haven't exhausted the list of political parties in America. But this sampling provides an idea of just how radical all modern political agendas remain. If one works backward in time from today, the mark of true conservatism would be a honest belief in and embrace of the hunter-gatherer way of life. What I am trying to point out is that today we are all, by virtue of our position in history, radicals. True conservatives are non-existent--except perhaps for a few hunter-gatherers. We are forced then by circumstances to choose which brand of radicalism to practice.
Sunday, August 14, 2011
When the sovereign falls: Is this the endgame for world markets?
Back in May in response to a question during an interview I suggested that when the sovereign debt of a major nation is finally questioned, it will signal the endgame for the worldwide bull market in just about everything. That moment has arrived, and my thesis will now be tested.
And, I'm not talking about the United States. I'm talking about France. The downgrade of U.S. government debt by one ratings agency was more political theater than careful, cold calculation. U.S. Treasury bonds rallied on the news. But in France it is a different matter. French banks are known to be heavily exposed to the sovereign debt of what are now infamously called the PIIGS, that is, Portugal, Ireland, Italy, Greece and Spain. What changed this week was that market participants began to think that this matters. They think the problem is so big that it could impair the credit of the French government which will ultimately be saddled with cleaning up the mess. And, who wants to stick around for that?
Nicole Foss, part of the duo who write for the popular financial site The Automatic Earth, once explained to me that liquidity and confidence are the same thing. Liquidity means I'm willing to part with my cash to lend it to you or to buy something from you. When my confidence in you is shattered, I won't lend to you. When my confidence in my own future prospects is shattered, I won't buy from you because I think I may need the cash later. That, it seems, is where much of the world finds itself today.
But the problem for French banks isn't necessarily that they are in worse shape than many other banks in the world. It's that people believe this to be so. And, as that belief spreads, it will become a self-fulfilling prophesy. At first, one, then two, then 10, then 20 banks and so on will refuse to lend to French banks. And, with each withdrawal of a source of funds French banks will become less creditworthy.
But if this loss of confidence isn't stopped soon, it will spread to non-French banks that have large financial ties to French banks. A cascade of financial ruin will be unleashed. We have built of world of huge financial institutions with heavily incestuous relations. They are like rafts all strapped together which doesn't help much if all the rafts are sinking.
Certainly, there are other factors at work. Persistently high oil prices have been draining the pockets of already beleaguered consumers. I was listening to CNBC one day to catch up on the excitement when investment show host Jim Cramer explained to me that falling oil prices were going to be good for the economy. That would be true if prices were falling because there is a glut of oil. In fact, oil prices have been falling in the face of falling production meaning that demand must be falling even faster. That can only happen when the economy is headed for the ditch.
I have people telling me that fundamentally the economy isn't all that bad. Maybe not now, I respond. But we are facing a potentially vicious feedback loop in which our huge, unwieldy, out-of-control and risk-laden financial sector destroys confidence in the real economy which will then make the economy decline, which will then make loans on bank balance sheets seem even more shaky.
One problem is very little transparency. A bank is like a black box. It's hard to evaluate what's on the balance sheet. And, it is especially hard now that banks have been released from the requirement that they mark their portfolios to market prices. They can now do what many skeptics call "mark to fantasy." In such an environment the only thing one bank doing business with another has to go on is reputation. And, this is where things get tricky. Supposedly, a rumor got started that a major French bank, Société Générale, was about to go under. The bank immediately denied it. But the taint and the fear are still there. Who really wants to do business with Société Générale just in case the rumor is true? Under different circumstances the rumor might have been easily dismissed. But the bank is believed to be holding a lot of dicey sovereign debt from countries that may not be able to pay the bank back in full. Anyway, it's a black box. Who really wants to trust a black box, especially when others are questioning the reputation of the black box?
Sovereign debt troubles are the last stop on the way to the endgame for the global bull market that has persisted for almost two years or perhaps more correctly for the last 30. Governments that might take on additional debt to goose the economy by spending on various public priorities such as new infrastructure are now busily reducing their expenditures to shore up their sagging long-term financial prospects. Several central banks have lowered interest rates to near zero to spur borrowing in the real economy. But all they've gotten is speculation in the financial markets which has only made matters worse.
There are really no good options from here on out. And, there's bound to be a lot more pain. The main issue now is who will be made to bear it. On past form the rich--who today so dominate the halls of government everywhere--will once again be exempted.
And, I'm not talking about the United States. I'm talking about France. The downgrade of U.S. government debt by one ratings agency was more political theater than careful, cold calculation. U.S. Treasury bonds rallied on the news. But in France it is a different matter. French banks are known to be heavily exposed to the sovereign debt of what are now infamously called the PIIGS, that is, Portugal, Ireland, Italy, Greece and Spain. What changed this week was that market participants began to think that this matters. They think the problem is so big that it could impair the credit of the French government which will ultimately be saddled with cleaning up the mess. And, who wants to stick around for that?
Nicole Foss, part of the duo who write for the popular financial site The Automatic Earth, once explained to me that liquidity and confidence are the same thing. Liquidity means I'm willing to part with my cash to lend it to you or to buy something from you. When my confidence in you is shattered, I won't lend to you. When my confidence in my own future prospects is shattered, I won't buy from you because I think I may need the cash later. That, it seems, is where much of the world finds itself today.
But the problem for French banks isn't necessarily that they are in worse shape than many other banks in the world. It's that people believe this to be so. And, as that belief spreads, it will become a self-fulfilling prophesy. At first, one, then two, then 10, then 20 banks and so on will refuse to lend to French banks. And, with each withdrawal of a source of funds French banks will become less creditworthy.
But if this loss of confidence isn't stopped soon, it will spread to non-French banks that have large financial ties to French banks. A cascade of financial ruin will be unleashed. We have built of world of huge financial institutions with heavily incestuous relations. They are like rafts all strapped together which doesn't help much if all the rafts are sinking.
Certainly, there are other factors at work. Persistently high oil prices have been draining the pockets of already beleaguered consumers. I was listening to CNBC one day to catch up on the excitement when investment show host Jim Cramer explained to me that falling oil prices were going to be good for the economy. That would be true if prices were falling because there is a glut of oil. In fact, oil prices have been falling in the face of falling production meaning that demand must be falling even faster. That can only happen when the economy is headed for the ditch.
I have people telling me that fundamentally the economy isn't all that bad. Maybe not now, I respond. But we are facing a potentially vicious feedback loop in which our huge, unwieldy, out-of-control and risk-laden financial sector destroys confidence in the real economy which will then make the economy decline, which will then make loans on bank balance sheets seem even more shaky.
One problem is very little transparency. A bank is like a black box. It's hard to evaluate what's on the balance sheet. And, it is especially hard now that banks have been released from the requirement that they mark their portfolios to market prices. They can now do what many skeptics call "mark to fantasy." In such an environment the only thing one bank doing business with another has to go on is reputation. And, this is where things get tricky. Supposedly, a rumor got started that a major French bank, Société Générale, was about to go under. The bank immediately denied it. But the taint and the fear are still there. Who really wants to do business with Société Générale just in case the rumor is true? Under different circumstances the rumor might have been easily dismissed. But the bank is believed to be holding a lot of dicey sovereign debt from countries that may not be able to pay the bank back in full. Anyway, it's a black box. Who really wants to trust a black box, especially when others are questioning the reputation of the black box?
Sovereign debt troubles are the last stop on the way to the endgame for the global bull market that has persisted for almost two years or perhaps more correctly for the last 30. Governments that might take on additional debt to goose the economy by spending on various public priorities such as new infrastructure are now busily reducing their expenditures to shore up their sagging long-term financial prospects. Several central banks have lowered interest rates to near zero to spur borrowing in the real economy. But all they've gotten is speculation in the financial markets which has only made matters worse.
There are really no good options from here on out. And, there's bound to be a lot more pain. The main issue now is who will be made to bear it. On past form the rich--who today so dominate the halls of government everywhere--will once again be exempted.
Friday, August 12, 2011
Keynoting at Illinois Renewable Energy Fair this weekend
I'll be giving a keynote speech at the Illinois Renewable Energy and Sustainable Lifestyle Fair on August 13th at 2:30 p.m. If you are coming to the fair, I hope to see you there.
Sunday, August 07, 2011
Norway's mad killer, private justice and the future of the state
When Anders Breivik, a native Norwegian, blew up eight people in downtown Oslo and shot 69 others, mostly young people attending a retreat sponsored by one of Norway's main political parties, he felt he was defending his homeland from an onslaught of immigrants. He wasn't part of the Norwegian army, nor its border patrol, nor any other agency of the government. He was a private individual acting out of his own belief that those associated with a lenient stance on immigration needed to be stopped, in this case Norway's ruling Labor Party.
Breivik distributed a 1500-page manifesto right before his rampage, a grab bag of conspiracy theories that comports neatly with type of individual described in Richard Hofstadter's 1964 essay "The Paranoid Style in American Politics." A considerable amount of the manifesto was taken from other sources, and so it isn't a coherent piece of argumentation. Before I even scanned the document I was sure there would be a section on the threatened Norwegian way of life, or at least an equivalent. There was, and it came in the form of an essay by another writer referring to the so-called "Swedish model," described as a third way between capitalism and communism. While I can't be sure Breivik embraces this idea completely, I'm relatively certain he wouldn't have included it unless he had considerable affinity for it.
I couldn't help contrasting this to America's so-called Tea Party whose members sought to derail health care reform which is designed to provide universal health care coverage. This group seems fully to have embraced the American mythology of the self-reliant man (and woman). Government control of anything is thought to mean less "freedom" for the individual. I put "freedom" in quotes for in this case it means less access to education, health care, old age benefits and a variety of public services which can actually enhance a person's range of choices. Whether many of the Tea Party members will embrace a constriction in the availability of such opportunities and services may now be tested given the recent deal in Congress for cutting spending.
My belief is that many of the Tea Party members are being perniciously misled by the billionaire backers of the movement. These backers are getting their hapless followers to advocate policies that simply reduce the tax burden on the rich while undermining services critical to the functioning of a complex industrial society and ones needed for basic social equity and harmony. It's a movement that can only be called anarchical. It is trying to disassemble the accomplishments of American society achieved through Franklin Roosevelt's New Deal and Lyndon Johnson's Great Society. It is a movement focused not so much on protecting American society from outside forces, but insulating the individual from society's reach and therefore also from its aid.
Breivik offers a significant contrast. He is certain that immigrants, specifically Muslim immigrants, don't share the values necessary to sustain the "Swedish model" in Norway. In a sense Breivik is protecting his "tribe" of Norwegians against outsiders who he believes would upset and ultimately destroy the established arrangements of his society. To that end in his manifesto he advocates energy independence through development of alternatives to displace oil completely (despite the fact that Norway is one of the world's largest oil producers). This independence would free countries from the tyranny of Arab oil and thus Muslim influences. He also believes global corporations should be nationalized in order to make them serve the needs of their host countries and peoples. Nothing could set him apart from America's Tea Party more than this.
From news reports we can deduce that Breivik is a disturbed personality, but not a marginalized person. Although he was from a broken home, he grew up in a comfortable flat with his mother and received all the benefits that any child receives in Norway. Breivik's rampage wasn't meant to bring down Norwegian society. On the contrary, he believed he was trying save it and its third way.
The public's revulsion for Breivik stems not just from the audacity of his deed and the number of people he killed and maimed. The context in which those deeds took place is also a factor. He abandoned normal political means for advancing his views--something he had previously engaged in at least minimally--and he chose to advance his goals as a self-appointed vigilante for the Norwegian people. His actions smack of klan-on-klan violence, something modern nations condemn because only the state ought to be empowered to dispense justice. Anything else is private justice, essentially a family or ethnic feud, which is antithetical to order and stability.
This is the message of the ancient Greek trilogy penned by Aeschylus, the Oresteia. After Orestes' mother kills his father, Agamemnon, in order to allow her lover, a cousin to Agamemnon, to gain Agamemnon's throne, Orestes kills his mother and the new king in vengeance. Plagued by the Furies for his terrible deed, Orestes only finds relief after a criminal trial in which he is found not guilty--a statement not about his actions, but a symbolic verdict designed to put an end to the perpetual blood feud that had cursed the House of Atreus for generations and had thus interfered with the establishment of an orderly state. The supremacy of the state in dispensing justice is also symbolically affirmed, and this affirmation becomes the path to a more peaceful society, the kind that Norway represents.
Breivik's delusions led him to "defend" his society through means that undermine it and could potentially destroy it. One need only look at societies such as Afghanistan, where private justice is still practiced, to see what it means. Although Tea Party members do not explicitly espouse private justice, their broad-ranging attempts to delegitimize the public sphere have the potential to split America into a thousand pieces. It is precisely because America has so much diversity that it sorely needs a strong public sphere to bind its people. Breivik was concerned that Muslims would destroy Norway's expansive and durable public sphere which afforded its native residents so many advantages. By contrast, the Tea Party believes that the public sphere which nominally binds us ought to be weakened in favor of individual action.
And now, finally, I reveal the reason for this line of investigation. The Breivik shootings reminded me that in the last year two acquaintances have urged me on separate occasions to purchase firearms as a measure to protect myself from what they see as emerging anarchy in the United States. One cited the possibility of a race war. After some clarification, what the person seemed to be talking about was an anarchical uprising of the poor against the rich, and many of the poor in urban areas are African-American and Latino. Another cited the depredations associated with the post-peak-oil era which this person suggested was already upon us. My response to both was the same: I don't want to live in a society in which carrying firearms becomes a daily necessity.
"But what if it does become a necessity?" each acquaintance asked in his or her own way.
"Then, perhaps it will be time for me to go." Both acquaintances were suitably astonished by my answer. "Look, even in Dodge City they made people check their guns at the city line before entering," I added.
For me firearms smack of klan or private justice. Nevertheless, I condemn no one who chooses to own guns for the protection of his or her home. But I deplore the notion that guns ought to be carried in public as a matter of course. I would prefer to empower my local authorities with the necessary resources to keep the public sphere safe. I desire private justice neither from those who fire the first shot nor from those who fire the second.
Vigilante, klan, family and private justice, all are the path to barbarism today just as surely as they were when Aeschylus wrote the Oresteia. I will stand on the side of civilization for as long as I am able. The only alternative I see is what philosopher Thomas Hobbes called "a war of all against all."
Breivik distributed a 1500-page manifesto right before his rampage, a grab bag of conspiracy theories that comports neatly with type of individual described in Richard Hofstadter's 1964 essay "The Paranoid Style in American Politics." A considerable amount of the manifesto was taken from other sources, and so it isn't a coherent piece of argumentation. Before I even scanned the document I was sure there would be a section on the threatened Norwegian way of life, or at least an equivalent. There was, and it came in the form of an essay by another writer referring to the so-called "Swedish model," described as a third way between capitalism and communism. While I can't be sure Breivik embraces this idea completely, I'm relatively certain he wouldn't have included it unless he had considerable affinity for it.
I couldn't help contrasting this to America's so-called Tea Party whose members sought to derail health care reform which is designed to provide universal health care coverage. This group seems fully to have embraced the American mythology of the self-reliant man (and woman). Government control of anything is thought to mean less "freedom" for the individual. I put "freedom" in quotes for in this case it means less access to education, health care, old age benefits and a variety of public services which can actually enhance a person's range of choices. Whether many of the Tea Party members will embrace a constriction in the availability of such opportunities and services may now be tested given the recent deal in Congress for cutting spending.
My belief is that many of the Tea Party members are being perniciously misled by the billionaire backers of the movement. These backers are getting their hapless followers to advocate policies that simply reduce the tax burden on the rich while undermining services critical to the functioning of a complex industrial society and ones needed for basic social equity and harmony. It's a movement that can only be called anarchical. It is trying to disassemble the accomplishments of American society achieved through Franklin Roosevelt's New Deal and Lyndon Johnson's Great Society. It is a movement focused not so much on protecting American society from outside forces, but insulating the individual from society's reach and therefore also from its aid.
Breivik offers a significant contrast. He is certain that immigrants, specifically Muslim immigrants, don't share the values necessary to sustain the "Swedish model" in Norway. In a sense Breivik is protecting his "tribe" of Norwegians against outsiders who he believes would upset and ultimately destroy the established arrangements of his society. To that end in his manifesto he advocates energy independence through development of alternatives to displace oil completely (despite the fact that Norway is one of the world's largest oil producers). This independence would free countries from the tyranny of Arab oil and thus Muslim influences. He also believes global corporations should be nationalized in order to make them serve the needs of their host countries and peoples. Nothing could set him apart from America's Tea Party more than this.
From news reports we can deduce that Breivik is a disturbed personality, but not a marginalized person. Although he was from a broken home, he grew up in a comfortable flat with his mother and received all the benefits that any child receives in Norway. Breivik's rampage wasn't meant to bring down Norwegian society. On the contrary, he believed he was trying save it and its third way.
The public's revulsion for Breivik stems not just from the audacity of his deed and the number of people he killed and maimed. The context in which those deeds took place is also a factor. He abandoned normal political means for advancing his views--something he had previously engaged in at least minimally--and he chose to advance his goals as a self-appointed vigilante for the Norwegian people. His actions smack of klan-on-klan violence, something modern nations condemn because only the state ought to be empowered to dispense justice. Anything else is private justice, essentially a family or ethnic feud, which is antithetical to order and stability.
This is the message of the ancient Greek trilogy penned by Aeschylus, the Oresteia. After Orestes' mother kills his father, Agamemnon, in order to allow her lover, a cousin to Agamemnon, to gain Agamemnon's throne, Orestes kills his mother and the new king in vengeance. Plagued by the Furies for his terrible deed, Orestes only finds relief after a criminal trial in which he is found not guilty--a statement not about his actions, but a symbolic verdict designed to put an end to the perpetual blood feud that had cursed the House of Atreus for generations and had thus interfered with the establishment of an orderly state. The supremacy of the state in dispensing justice is also symbolically affirmed, and this affirmation becomes the path to a more peaceful society, the kind that Norway represents.
Breivik's delusions led him to "defend" his society through means that undermine it and could potentially destroy it. One need only look at societies such as Afghanistan, where private justice is still practiced, to see what it means. Although Tea Party members do not explicitly espouse private justice, their broad-ranging attempts to delegitimize the public sphere have the potential to split America into a thousand pieces. It is precisely because America has so much diversity that it sorely needs a strong public sphere to bind its people. Breivik was concerned that Muslims would destroy Norway's expansive and durable public sphere which afforded its native residents so many advantages. By contrast, the Tea Party believes that the public sphere which nominally binds us ought to be weakened in favor of individual action.
And now, finally, I reveal the reason for this line of investigation. The Breivik shootings reminded me that in the last year two acquaintances have urged me on separate occasions to purchase firearms as a measure to protect myself from what they see as emerging anarchy in the United States. One cited the possibility of a race war. After some clarification, what the person seemed to be talking about was an anarchical uprising of the poor against the rich, and many of the poor in urban areas are African-American and Latino. Another cited the depredations associated with the post-peak-oil era which this person suggested was already upon us. My response to both was the same: I don't want to live in a society in which carrying firearms becomes a daily necessity.
"But what if it does become a necessity?" each acquaintance asked in his or her own way.
"Then, perhaps it will be time for me to go." Both acquaintances were suitably astonished by my answer. "Look, even in Dodge City they made people check their guns at the city line before entering," I added.
For me firearms smack of klan or private justice. Nevertheless, I condemn no one who chooses to own guns for the protection of his or her home. But I deplore the notion that guns ought to be carried in public as a matter of course. I would prefer to empower my local authorities with the necessary resources to keep the public sphere safe. I desire private justice neither from those who fire the first shot nor from those who fire the second.
Vigilante, klan, family and private justice, all are the path to barbarism today just as surely as they were when Aeschylus wrote the Oresteia. I will stand on the side of civilization for as long as I am able. The only alternative I see is what philosopher Thomas Hobbes called "a war of all against all."
Sunday, July 31, 2011
Can taxation speed our energy transition?
Some time ago an economist with whom I had an extensive exchange suggested that the best way to incentivize an energy transition would be to tax what we don't want and let the market do the rest. It was really such an elegant approach and an impractical one, I thought.
The economist's view was that if we don't want people to burn carbon-based fuels, then we should just tax those fuels heavily. What he opposed was any direct subsidies to alternatives such as wind, solar, and biomass. This would only serve to distort the economy, he said, and it is too hard to figure out the quickest path to an energy transition from the vantage point of a central government.
Indeed, one of the proposals before the U.S. Congress would be to tax carbon and rebate a substantial portion of the revenues to the taxpayers. This increasingly seems like a better idea than so-called "cap and trade" schemes which may not be able to cover all types of carbon-based energy and will likely be gamed by the same financial wizards on Wall Street that brought us the crash of 2008.
And so, I do agree with my economist acquaintance that taxation could be an elegant method for facilitating an energy transition. But is such taxation practical and even adequate? One might point to Europe where extremely high fuel taxes have been part of the reason that the average European uses one-half the amount of energy of the average American. Whether high fuel taxes could become a reality in the United States is an open question. So far no American politician has dared to propose a level of taxation comparable to Europe.
The main reason for this is that the United States still has enormous fossil fuel reserves and as a consequence a well-funded fossil fuel lobby that has a stranglehold on the U.S. Congress. Europe is now largely bereft of fossil fuels and therefore has a fossil fuel lobby without the necessary influence to prevent high energy taxes and heavy expenditures on public transportation.
And what about promoting public transportation? I asked my economist. If automobile and highway transportation had not been so heavily subsidized by the government, he explained, what we call public transportation today might have remained excellent and in private hands just as it was before automobiles supplanted rail and streetcar transportation. In addition, air travel has been heavily subsidized through airport construction and maintenance and a federally supervised air traffic control system. Take away all the subsidies, the economist suggested, and the price of air and automobile transport would rise to the point that privately maintained rail and bus transportation would likely be competitive.
Perhaps. But we cannot run that movie backwards and start over again. The subsidized infrastructure for automobiles and airplanes is already in place. And, periodic attempts to hike energy taxes in the United States to achieve various objectives including reducing the federal deficit, reducing oil imports, increasing energy efficiency, and reducing pollution have only met with failure. In 1970 President Richard Nixon briefly entertained the idea of an oil import tariff, but then dropped it. In 1980 independent presidential candidate John Anderson proposed a 50-cent per gallon tax on gasoline and finished with just 7 percent of the popular vote. President Bill Clinton tried to tax fuels based on their BTU content. But the plan was ultimately shot down in the Senate. Certainly, some energy taxes have risen such as state gasoline taxes, but only to keep pace with the need to maintain and build roads and bridges which, of course, encourage yet more fossil fuel consumption. (And even the increases in these taxes have largely failed to keep pace with the need for repairs of America's crumbling transportation infrastructure.)
The only taxes in the United States which have risen sharply are those on things which the public has long since categorized as a menace. So-called "sin" taxes have been popular with state governments attempting to balance their budgets. For example, taxes on cigarettes have risen steeply in most states.
But it is probably a vain hope that Americans will come to regard our fossil fuel addiction to be as serious as our addiction to cigarettes and decide to levy high taxes both to discourage fossil fuel use and to encourage alternatives. Taxing fossil fuels heavily and ending subsidies that encourage their use would be an elegant approach for sure. But I believe such an approach continues to be politically very difficult to implement in the United States. Therefore, we in America must work with what is currently feasible--a hodgepodge of government subsidies and tax incentives for alternatives to fossil fuels and for energy efficiency that unfortunately are subject to attacks from the fossil fuel lobby on a regular basis.
The economist's view was that if we don't want people to burn carbon-based fuels, then we should just tax those fuels heavily. What he opposed was any direct subsidies to alternatives such as wind, solar, and biomass. This would only serve to distort the economy, he said, and it is too hard to figure out the quickest path to an energy transition from the vantage point of a central government.
Indeed, one of the proposals before the U.S. Congress would be to tax carbon and rebate a substantial portion of the revenues to the taxpayers. This increasingly seems like a better idea than so-called "cap and trade" schemes which may not be able to cover all types of carbon-based energy and will likely be gamed by the same financial wizards on Wall Street that brought us the crash of 2008.
And so, I do agree with my economist acquaintance that taxation could be an elegant method for facilitating an energy transition. But is such taxation practical and even adequate? One might point to Europe where extremely high fuel taxes have been part of the reason that the average European uses one-half the amount of energy of the average American. Whether high fuel taxes could become a reality in the United States is an open question. So far no American politician has dared to propose a level of taxation comparable to Europe.
The main reason for this is that the United States still has enormous fossil fuel reserves and as a consequence a well-funded fossil fuel lobby that has a stranglehold on the U.S. Congress. Europe is now largely bereft of fossil fuels and therefore has a fossil fuel lobby without the necessary influence to prevent high energy taxes and heavy expenditures on public transportation.
And what about promoting public transportation? I asked my economist. If automobile and highway transportation had not been so heavily subsidized by the government, he explained, what we call public transportation today might have remained excellent and in private hands just as it was before automobiles supplanted rail and streetcar transportation. In addition, air travel has been heavily subsidized through airport construction and maintenance and a federally supervised air traffic control system. Take away all the subsidies, the economist suggested, and the price of air and automobile transport would rise to the point that privately maintained rail and bus transportation would likely be competitive.
Perhaps. But we cannot run that movie backwards and start over again. The subsidized infrastructure for automobiles and airplanes is already in place. And, periodic attempts to hike energy taxes in the United States to achieve various objectives including reducing the federal deficit, reducing oil imports, increasing energy efficiency, and reducing pollution have only met with failure. In 1970 President Richard Nixon briefly entertained the idea of an oil import tariff, but then dropped it. In 1980 independent presidential candidate John Anderson proposed a 50-cent per gallon tax on gasoline and finished with just 7 percent of the popular vote. President Bill Clinton tried to tax fuels based on their BTU content. But the plan was ultimately shot down in the Senate. Certainly, some energy taxes have risen such as state gasoline taxes, but only to keep pace with the need to maintain and build roads and bridges which, of course, encourage yet more fossil fuel consumption. (And even the increases in these taxes have largely failed to keep pace with the need for repairs of America's crumbling transportation infrastructure.)
The only taxes in the United States which have risen sharply are those on things which the public has long since categorized as a menace. So-called "sin" taxes have been popular with state governments attempting to balance their budgets. For example, taxes on cigarettes have risen steeply in most states.
But it is probably a vain hope that Americans will come to regard our fossil fuel addiction to be as serious as our addiction to cigarettes and decide to levy high taxes both to discourage fossil fuel use and to encourage alternatives. Taxing fossil fuels heavily and ending subsidies that encourage their use would be an elegant approach for sure. But I believe such an approach continues to be politically very difficult to implement in the United States. Therefore, we in America must work with what is currently feasible--a hodgepodge of government subsidies and tax incentives for alternatives to fossil fuels and for energy efficiency that unfortunately are subject to attacks from the fossil fuel lobby on a regular basis.
Sunday, July 24, 2011
Fly me to the moon (and let me mine among the stars)
Several years ago a young boy asked me during a presentation if we might be able to pipe in oil and natural gas from the Moon or other planets. I thanked him for the idea and explained that the cost of a pipeline would be far greater than the value of any oil and natural gas we might find.
But dreams of exploiting mineral wealth on other celestial bodies lurk not only in the minds of young boys, but also in the minds of intelligent and completely sane adults. The most recent iteration of this dream comes from scientists working on fusion energy. It turns out that helium-3, a rare isotope of helium, may be useful as fuel for fusion reactors. The very small quantities of helium-3 available on planet Earth are a byproduct of the manufacture of hydrogen bombs using tritium, a radioactive isotope of hydrogen. Ironically, one of the advantages of helium-3 in fusion reactors is that it lends itself less to weapons proliferation than tritium, the decay of which is the source of helium-3. In addition, helium-3 fueled reactors would produce no radioactive waste.
The problem is getting sufficient quantities of the stuff. The solution according to one scientist working on a helium-3 fusion reactor is to mine the isotope on the Moon and bring it back to Earth. The Moon's surface is thought to contain a million tons. At the current price of $7,000 a gram with a little more than 900,000 grams to a ton, that works out to be about $6.3 quadrillion. One could expect the price to decline somewhat should a steady supply become available.
I am reminded of James Howard Kunstler's admonition that during times of great stress mass delusions of deliverance--in this case through technology--are often afoot. I cannot fault fusion researchers for working on the intriguing problem of sustaining a fusion reaction that will produce more energy than it consumes. Nor can I fault them for seeking out the safest fuel possible. But the drumbeat in the media that alternatives are just around the corner--if we will only do things such as set up a Moon base and mine the surface--take the public's eye off more viable responses.
This is no conspiracy. The past 150 years of astonishing technical advances have trained us all to expect more of the same in response to every perceived problem. We've actually been to the Moon and back, carrying hundreds of pounds of its surface with us on the return trip for use in scientific investigations. Couldn't we just go back and do it on a greater scale?
The potential financial rewards may make it seem possible. But wait! First, we have to perfect fusion using helium-3. This is where the public and the media conveniently forget that scientists, some of them quite well-funded, have been working on fusion energy for 60 years already. And yet, even the most lavishly funded of the current crop of projects, the International Thermonuclear Experimental Reactor (ITER), explains on its website that "[t]he timescale to commercial fusion therefore extends until at least the middle of this century...." All this should tell us that the technical hurdles to producing commercial electricity from fusion may never be breached or at least not in any time frame that matters to a world whose main sources of energy, fossil fuels, will certainly peak and begin declining before mid-century and likely much sooner.
In addition, many of the services that are necessary to ITER are currently powered by fossil fuels--though one must admit that ITER's location in France means it is more dependent on the power generation of conventional fission reactors than it would be elsewhere. But even those fission reactors are heavily dependent on fossil fuels for their servicing.
To the already long, complex logistics chain for reactors, the proponents of the helium-3 fueled version of the fusion reactor hope someday to add mining on the Moon. Of course, it is in the nature of humans to dream. And, their technological dreams have been made manifest in many ways in the industrial age. But the fulfillment of those dreams has been largely due to the wide availability and low cost of energy resources, the vast majority of them from fossil fuels.
Ignorant of that reality we can imagine just about anything--even mining camps on the Moon with ore-carrying shuttles. But the decline of fossil fuels--which have up until now allowed us to harbor such daydreams--may soon shock us back to reality and return us to the urgent task of organizing a society that runs on less, not more energy.
But dreams of exploiting mineral wealth on other celestial bodies lurk not only in the minds of young boys, but also in the minds of intelligent and completely sane adults. The most recent iteration of this dream comes from scientists working on fusion energy. It turns out that helium-3, a rare isotope of helium, may be useful as fuel for fusion reactors. The very small quantities of helium-3 available on planet Earth are a byproduct of the manufacture of hydrogen bombs using tritium, a radioactive isotope of hydrogen. Ironically, one of the advantages of helium-3 in fusion reactors is that it lends itself less to weapons proliferation than tritium, the decay of which is the source of helium-3. In addition, helium-3 fueled reactors would produce no radioactive waste.
The problem is getting sufficient quantities of the stuff. The solution according to one scientist working on a helium-3 fusion reactor is to mine the isotope on the Moon and bring it back to Earth. The Moon's surface is thought to contain a million tons. At the current price of $7,000 a gram with a little more than 900,000 grams to a ton, that works out to be about $6.3 quadrillion. One could expect the price to decline somewhat should a steady supply become available.
I am reminded of James Howard Kunstler's admonition that during times of great stress mass delusions of deliverance--in this case through technology--are often afoot. I cannot fault fusion researchers for working on the intriguing problem of sustaining a fusion reaction that will produce more energy than it consumes. Nor can I fault them for seeking out the safest fuel possible. But the drumbeat in the media that alternatives are just around the corner--if we will only do things such as set up a Moon base and mine the surface--take the public's eye off more viable responses.
This is no conspiracy. The past 150 years of astonishing technical advances have trained us all to expect more of the same in response to every perceived problem. We've actually been to the Moon and back, carrying hundreds of pounds of its surface with us on the return trip for use in scientific investigations. Couldn't we just go back and do it on a greater scale?
The potential financial rewards may make it seem possible. But wait! First, we have to perfect fusion using helium-3. This is where the public and the media conveniently forget that scientists, some of them quite well-funded, have been working on fusion energy for 60 years already. And yet, even the most lavishly funded of the current crop of projects, the International Thermonuclear Experimental Reactor (ITER), explains on its website that "[t]he timescale to commercial fusion therefore extends until at least the middle of this century...." All this should tell us that the technical hurdles to producing commercial electricity from fusion may never be breached or at least not in any time frame that matters to a world whose main sources of energy, fossil fuels, will certainly peak and begin declining before mid-century and likely much sooner.
In addition, many of the services that are necessary to ITER are currently powered by fossil fuels--though one must admit that ITER's location in France means it is more dependent on the power generation of conventional fission reactors than it would be elsewhere. But even those fission reactors are heavily dependent on fossil fuels for their servicing.
To the already long, complex logistics chain for reactors, the proponents of the helium-3 fueled version of the fusion reactor hope someday to add mining on the Moon. Of course, it is in the nature of humans to dream. And, their technological dreams have been made manifest in many ways in the industrial age. But the fulfillment of those dreams has been largely due to the wide availability and low cost of energy resources, the vast majority of them from fossil fuels.
Ignorant of that reality we can imagine just about anything--even mining camps on the Moon with ore-carrying shuttles. But the decline of fossil fuels--which have up until now allowed us to harbor such daydreams--may soon shock us back to reality and return us to the urgent task of organizing a society that runs on less, not more energy.
Sunday, July 17, 2011
Less energy is better--really
I now make it a staple of my public talks on energy to ask who in the audience has been to Europe. Usually many hands rise. I then explain that Americans seem to love to get on a jet plane, cross the Atlantic, and spend time in a theme park called Europe where good meals abound; interesting and usually friendly people reside; and beautiful, historic cities and breathtaking countryside are everywhere. What they may not know is that by American standards Europeans live in an energy-starved society where the per capita energy consumption is only half that of the United States.
There are many things that make European energy frugality possible: the density of European cities; the wide availability of good public transportation; the willingness of people to walk or bicycle to their destinations; small cars; and parsimonious use of central heating to name just a few. Perhaps the key to understanding Europeans when it comes to energy use is the very high price of energy in Europe, due primarily to stratospheric energy taxes. For example, in the United Kingdom the effective tax rate on motor fuel for automobiles as of December 2010 was 175 percent. When something costs a lot, people tend to figure out how to use less of it or to use it not at all.
The European example should give us great pause on this side of the Atlantic. It is perhaps the clearest illustration that beyond a certain level of energy consumption, the quality of life rises almost imperceptibly or not at all. In fact, high energy use may even be correlated to a lower quality of life in the United States where obesity and diabetes have become epidemics (in part because we drive too much instead of walking or bicycling); where sprawled out suburban development made possible by cheap fuel condemns many of us to spend hours in the car each day; where the availability of that cheap fuel encourages motorized recreation that keeps our lakes and parks abuzz with engine noise while it degrades and pollutes them; where cheap consumer goods are often characterized by their low quality; where mountains of those shoddy goods clog our landfills; and where all the required extra energy production creates additional pollution at our mines, power plants and factories.
And yet in the United States, we continue to focus on producing ever increasing amounts of energy, believing wrongly that greater energy use will always mean an increasing quality of life. Any person who dares to talk about cutting our energy use usually gets shouted down as a Luddite who hates the poor and cares for plants and animals more than human beings. Keep in mind that compared to America, European countries collectively run an economy larger than that of the United States; generally have considerably lower levels of inequality; provide universal health care with better overall outcomes; and enforce stricter environmental, health and safety regulations--all on half the energy per person. Vaclav Smil illustrates this phenomenon in a recent article entitled "Science, energy, ethics, and civilization." (PDF) He notes that there is an inflection point for many quality of life measures at around 100 gigajoules/year per person. Above that, indicators improve very little. For comparison the United States uses 330 gigajoules/year per person. Smil thinks consumption above 200 gigajoules is actually counterproductive.
To the rational mind the sensible thing to do would be to cut down. But humans are evolutionarily designed for scarcity. Their evolutionary impulses haven't caught up with modern realities. Besides this, consumption has also become correlated with status. As Thorsten Veblen so ably explained in The Theory of the Leisure Class, in a mass society it is much easier to display one's social position to large numbers of people by buying a grand mansion or an expensive automobile than by trying to walk the streets of a city the size of New York with a large retinue. Veblen coined the now familiar phrase to describe the first strategy: conspicuous consumption. The second strategy often sufficed in ancient Rome which was, of course, much smaller in population than New York. Veblen also expressly showed how the quest for social status trumped abstract theoretical notions of rational utility-seeking in economic decision-making.
Humans are energy-gathering machines. If they did not gather more energy than they expend, they would instantly die out. Every organism on the planet seeks to maximize its energy gain. So consistent is this pattern that Howard Odum dubbed it the Maximum Power Principle and proposed it as the fourth law of thermodynamics.
But as with any adaptive strategy, it eventually becomes maladaptive. If an organism cannot evolve to match changing conditions--in this case, rapid fossil fuel depletion, climate change, soil degradation and so on--then dieoff or extinction can follow. And, just because I and many others can articulate the problem, it does not at all imply that a meaningful and broad-based understanding can spread and that a response can be implemented in time to avert the worst. Every fiber of a human being instinctively rejects limits on energy gathering--unless those limits can be framed as a necessary sacrifice for the good of a group to which that human being feels a strong attachment.
To say one needs to use less energy for the good of humanity has very limited appeal. To say one needs to do it for God, king and country is a move in the right direction.
There are many things that make European energy frugality possible: the density of European cities; the wide availability of good public transportation; the willingness of people to walk or bicycle to their destinations; small cars; and parsimonious use of central heating to name just a few. Perhaps the key to understanding Europeans when it comes to energy use is the very high price of energy in Europe, due primarily to stratospheric energy taxes. For example, in the United Kingdom the effective tax rate on motor fuel for automobiles as of December 2010 was 175 percent. When something costs a lot, people tend to figure out how to use less of it or to use it not at all.
The European example should give us great pause on this side of the Atlantic. It is perhaps the clearest illustration that beyond a certain level of energy consumption, the quality of life rises almost imperceptibly or not at all. In fact, high energy use may even be correlated to a lower quality of life in the United States where obesity and diabetes have become epidemics (in part because we drive too much instead of walking or bicycling); where sprawled out suburban development made possible by cheap fuel condemns many of us to spend hours in the car each day; where the availability of that cheap fuel encourages motorized recreation that keeps our lakes and parks abuzz with engine noise while it degrades and pollutes them; where cheap consumer goods are often characterized by their low quality; where mountains of those shoddy goods clog our landfills; and where all the required extra energy production creates additional pollution at our mines, power plants and factories.
And yet in the United States, we continue to focus on producing ever increasing amounts of energy, believing wrongly that greater energy use will always mean an increasing quality of life. Any person who dares to talk about cutting our energy use usually gets shouted down as a Luddite who hates the poor and cares for plants and animals more than human beings. Keep in mind that compared to America, European countries collectively run an economy larger than that of the United States; generally have considerably lower levels of inequality; provide universal health care with better overall outcomes; and enforce stricter environmental, health and safety regulations--all on half the energy per person. Vaclav Smil illustrates this phenomenon in a recent article entitled "Science, energy, ethics, and civilization." (PDF) He notes that there is an inflection point for many quality of life measures at around 100 gigajoules/year per person. Above that, indicators improve very little. For comparison the United States uses 330 gigajoules/year per person. Smil thinks consumption above 200 gigajoules is actually counterproductive.
To the rational mind the sensible thing to do would be to cut down. But humans are evolutionarily designed for scarcity. Their evolutionary impulses haven't caught up with modern realities. Besides this, consumption has also become correlated with status. As Thorsten Veblen so ably explained in The Theory of the Leisure Class, in a mass society it is much easier to display one's social position to large numbers of people by buying a grand mansion or an expensive automobile than by trying to walk the streets of a city the size of New York with a large retinue. Veblen coined the now familiar phrase to describe the first strategy: conspicuous consumption. The second strategy often sufficed in ancient Rome which was, of course, much smaller in population than New York. Veblen also expressly showed how the quest for social status trumped abstract theoretical notions of rational utility-seeking in economic decision-making.
Humans are energy-gathering machines. If they did not gather more energy than they expend, they would instantly die out. Every organism on the planet seeks to maximize its energy gain. So consistent is this pattern that Howard Odum dubbed it the Maximum Power Principle and proposed it as the fourth law of thermodynamics.
But as with any adaptive strategy, it eventually becomes maladaptive. If an organism cannot evolve to match changing conditions--in this case, rapid fossil fuel depletion, climate change, soil degradation and so on--then dieoff or extinction can follow. And, just because I and many others can articulate the problem, it does not at all imply that a meaningful and broad-based understanding can spread and that a response can be implemented in time to avert the worst. Every fiber of a human being instinctively rejects limits on energy gathering--unless those limits can be framed as a necessary sacrifice for the good of a group to which that human being feels a strong attachment.
To say one needs to use less energy for the good of humanity has very limited appeal. To say one needs to do it for God, king and country is a move in the right direction.
Sunday, July 10, 2011
Did I miss something or is Canada now the 51st state?
Back in 2008 my congressman, Fred Upton (R-Michigan), then the ranking Republican member of the U.S. House Subcommittee on Energy and Air Quality, still acknowledged there was a border between the United States and Canada. He claimed that oil from the Canadian tar sands was not reaching the United States, saying, "We stop it at the border." He meant he believed that the pipeline network could not bring it into the United States, a claim that was simply wrong.
But he did get the part about there being a border between the two countries right. Since then Upton has become the chairman of the House Energy and Commerce Committee, and with his elevation, the U.S.-Canadian border seems to have vanished. No, we Americans are not now living in provinces that report to Ottawa. Instead, it is Canada that has become part of the United States. Here is the exchange between Upton and Energy Now! in a recent interview. The interviewer asks about the release of oil from the U.S. Strategic Petroleum Reserve:
But he did get the part about there being a border between the two countries right. Since then Upton has become the chairman of the House Energy and Commerce Committee, and with his elevation, the U.S.-Canadian border seems to have vanished. No, we Americans are not now living in provinces that report to Ottawa. Instead, it is Canada that has become part of the United States. Here is the exchange between Upton and Energy Now! in a recent interview. The interviewer asks about the release of oil from the U.S. Strategic Petroleum Reserve:
INTERVIEWER: But the reasoning is that, essentially, this is an emergency, because of the loss of 140 million barrels so far of oil because of the strife in Libya, 1.5 million barrels a day. And also because gasoline prices are high. Those aren't emergencies?
UPTON: Well, a couple things. The administration has so far blocked the permitting and plans in the Gulf, which allows 1/3 of our oil to come from that region. If they simply say--and already it's hundreds of thousands of barrels a day, from projections that were made public just, you know, last fall--if they would simply say, "It's time to start again here in this country," whether it's from Canada, Alaska, the Gulf, I think that we could more than make up for what the disruption has been for the Middle East.
Now, I am almost certain that Upton realizes that Canada is a separate country. But for purposes of energy supply he speaks as if it isn't. And, that is indicative of the signal pathology of America energy policy. We have failed to manage our energy use and deploy sufficient alternatives so that we can be largely independent of energy imports. Instead, the United States military has long since become a vast worldwide oil supply protection force that is currently mired in three wars in Iraq, Afghanistan and Libya. We don't factor the trillions spent on this task into our energy costs, but we should. We would then find it much cheaper (in terms of money, not to mention loss of life) simply to reduce our energy use through conservation and efficiency while deploying alternatives. We got started on this in the 1970s. But, we were lulled to sleep by deceptively low energy prices in the 1980s and 1990s.
The implication of our current posture is that "our" oil is merely inconveniently parked under the territory of other countries, Canada among them. While the North American Free Trade Agreement prevents Canada from abruptly reducing America's share of oil production coming from that country, Canadians can pull out of the agreement with six months' notice. How would the United States react if the Canadians decided to export more of their oil to Asia? Or to reserve more oil for domestic consumption? Or simply to lower production to save oil for future generations of Canadians?
For now Upton has the luxury of thinking of Canada as America's 51st state for purposes of energy supply. A strenuously pro-American administration currently sits in Ottawa and wants ever closer ties to the United States. But as events around the world remind us, it may not be ever thus.
Keep in mind that Canada imported more than 43 percent of the crude oil it used in 2010, according the country's National Energy Board. That's right, imported! That's because even though the country produces almost one and half times the oil it consumes, it has never bothered to link sufficiently the western part of the country with the eastern part to move that oil from where it is primarily produced to where it is primarily consumed. The bulk of Canadian oil production is exported to the United States. So, the eastern provinces must import substantial amounts of oil from abroad. Canada could be oil independent, but chooses not to--for now. (In fact, it could be entirely energy independent when one considers its substantial production of uranium and natural gas.)
It is not only sloppy thinking to regard oil in Canada and other countries as "our" oil. It is a mindset dangerously out of touch with the emerging realities of strained global oil supplies. One has only to imagine how Americans and especially members of Congress would feel if it were Canada treating the United States as merely another province to be plucked of its energy resources at will.
We would almost certainly hear thundering voices across the airwaves and in the halls of Congress sounding the alarm over the threat to our sovereignty and the importance of reserving vital energy supplies for use by the American people. What makes us think that Canadians won't someday feel that same way about the oil they are exporting to the United States?
Sunday, July 03, 2011
Interview on Equal Time radio
In lieu of my regular posting, I'm linking to a radio interview I did last week on WDEV which is located in Waterbury, Vermont. Carl Etnier, host of the show "Equal Time," started with my peak-oil-themed novel Prelude. Then, we went on to a wide-ranging discussion which covered who in government circles understands peak oil, Vermont's new peak-oil-aware governor, the inscrutable and often unmanageably complex human-built systems within which we live, the advisability of using nature as a guide for redesigning those systems, and recent revelations in the media about exaggerated and perhaps fraudulent claims concerning the amount of natural gas we can expect from shale gas fields. The second half of the hour-long program is devoted to an interview with a Vermont Law School faculty member who discusses the fight over possible closure of the Yankee nuclear power plant in Vermont. Here again is the link for the entire program:
Equal Time Interview 6/27/11
Equal Time Interview 6/27/11
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